LCNB (US:LCNB)2023-05-11 21:06Financial Performance - Net income for the first quarter of 2023 was $4,157 thousand, a decrease of 8.1% from $4,523 thousand in Q1 2022[15]. - Net interest income after provision for credit losses was $13,999 thousand for the three months ended March 31, 2023, slightly down from $14,174 thousand in the same period of 2022, a decrease of 1.2%[15]. - Non-interest income for Q1 2023 was $3.6 million, unchanged from Q1 2022, with increases in fiduciary income and service charges offset by decreased gains from loan sales[169]. - The company reported a total comprehensive income of $9,107 thousand for the three months ended March 31, 2023, compared to a loss of $8,665 thousand in the same period of 2022[17]. - Basic earnings per common share for Q1 2023 was $0.37, unchanged from Q1 2022[137]. Assets and Liabilities - Total assets increased to $1,924,531 thousand as of March 31, 2023, compared to $1,919,121 thousand at December 31, 2022, reflecting a growth of 0.7%[13]. - Total deposits remained stable at $1,603,881 thousand as of March 31, 2023, compared to $1,604,970 thousand at December 31, 2022[13]. - Cash and cash equivalents at the end of the period rose to $31,876 million, up from $19,941 million, marking a 59.9% increase[23]. - The company’s total shareholders' equity increased to $204,072 thousand as of March 31, 2023, from $200,675 thousand at December 31, 2022, reflecting a growth of 1.2%[13]. - Long-term debt decreased to $18.6 million as of March 31, 2023, from $19.1 million at December 31, 2022, with a fixed interest rate of 4.25% on the term loan[107]. Loans and Credit Quality - The company reported a net increase in loans of $6,912 million, contrasting with a decrease of $9,827 million in the same period last year[23]. - The allowance for credit losses (ACL) on loans was reported at $7,842 million, reflecting adjustments under the new CECL methodology adopted on January 1, 2023[34]. - The total loans outstanding as of March 31, 2023, amounted to $1,394,830,000, compared to $1,401,278,000 on December 31, 2022, indicating a slight decrease of about 0.5%[77]. - The ratio of non-accrual loans to total loans outstanding was 0.05% as of March 31, 2023, compared to 0.03% as of December 31, 2022[70]. - The company has maintained a strong loan portfolio with a focus on commercial and industrial sectors, which accounted for a significant portion of total loans[93]. Interest Income and Expense - Total interest income rose to $17,918 thousand in Q1 2023, up 18.5% from $15,122 thousand in Q1 2022, driven by increased interest and fees on loans[15]. - Total interest expense rose by $3.077 million in Q1 2023, mainly due to increased expenses for NOW and money market deposits, IRA and time certificates, and short-term borrowings[180]. - The average rate on loans increased by 65 basis points, contributing to higher loan interest income[179]. - Net interest income for Q1 2023 was $13.9 million, down from $14.2 million in Q1 2022, with a net interest margin of 3.28% compared to 3.35% in the prior year[168]. Deposits and Borrowings - Total deposits decreased slightly to $1,603.9 million as of March 31, 2023, compared to $1,605.0 million at December 31, 2022[106]. - Short-term borrowings increased to $76.5 million as of March 31, 2023, compared to $71.5 million at December 31, 2022, with a revolving line of credit at 7.75%[110]. - The aggregate amount of time deposits in denominations of $250,000 or more increased to $30.6 million as of March 31, 2023, from $16.1 million at December 31, 2022[106]. Credit Losses and Provisions - The provision for credit losses for the three months ended March 31, 2023, was $32,000, compared to a recovery of $49,000 in the same period of 2022[75]. - The allowance for loan losses increased to $7.86 million from $5.65 million, representing a rise of 39.0%[66]. - The company recorded a recovery of credit losses of $57,000 in Q1 2023, compared to a provision for credit losses of $49,000 in Q1 2022[169]. Tax and Regulatory Capital - The effective tax rate for the three months ended March 31, 2023, was 17.8%, slightly higher than 17.4% for the same period in 2022[116]. - Common Equity Tier 1 Capital to risk-weighted assets ratio was 11.97% as of March 31, 2023, slightly up from 11.94% at the end of 2022[202]. Market Conditions and Future Outlook - The company anticipates potential challenges in loan and deposit growth due to competitive pressures and economic conditions[155]. - Future outlook suggests continued focus on maintaining loan quality and exploring market expansion opportunities[93].